In the Probit Model Pr(Y = 1 X1,X2

question 12

Multiple Choice

In the probit model Pr(Y = 1 X1,X2,... ,Xk) = Φ(β0 + β1X1 + βxX2 + ...+ βkXk) ,

• A)the β's do not have a simple interpretation.
• B)the slopes tell you the effect of a unit increase in X on the probability of Y.
• C)β0 cannot be negative since probabilities have to lie between 0 and 1.
• D)β0 is the probability of observing Y when all X's are 0

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